November 2, 09

NEWS / U.S. Sues Canadian Company and U.S. Subsidiary for False Claims Act Allegations

WASHINGTON - The United States today sued Lincoln Fabrics Ltd., a Canadian company, and Lincoln Fabrics Inc., aka Lincoln Textiles Inc., its American subsidiary, under the False Claims Act in connection with the companies’ weaving and sale of defective Zylon fabric which was used as the key ballistic material in bullet-proof vests, the Justice Department announced.

The United States alleges that the companies were aware that the woven Zylon degraded quickly over time, especially in hot and humid conditions, and that the companies knew that this degradation rendered bullet-proof vests containing woven Zylon unfit for use. The government further alleges that, despite this knowledge, the companies did not inform the United States or stop selling woven Zylon for ballistic applications.

"Companies that knowingly sell the government defective bullet-proof vests not only submit false claims, they put the lives of our law enforcement personnel at risk," said Tony West, Assistant Attorney General for the Department’s Civil Division. "The United States takes very seriously allegations that these two companies knowingly participated in the manufacture and sale of defective bullet-proof vests."

The United States is already pursuing lawsuits against Toyobo Co., the manufacturer of the Zylon fiber; Honeywell International Inc., the manufacturer of a Zylon laminate product called Z Shield; two body armor manufacturers - Second Chance Body Armor Inc. (now SCBA Liquidation Inc.) and First Choice Armor Inc., as well as several executives of the two companies. The government has previously settled for more than $47 million with five other entities that were involved in the manufacture or sale of defective Zylon vests, including two other weavers of ballistic Zylon.

Assistant Attorney General West acknowledged the contributions of the many government agencies assisting the government’s ongoing investigation of those who participated in the manufacture and sale of Zylon vests, including the Justice Department’s Civil Division; U.S. Attorney’s Office for the District of Columbia; General Services Administration Office of the Inspector General; Department of Homeland Security, Office of Inspector General; Department of the Treasury’s Inspector General for Tax Administration; Defense Criminal Investigative Service; U.S. Army Criminal Investigative Division; Air Force Office of Special Investigations; Department of Energy Office of the Inspector General; U.S. Agency for International Development Office of the Inspector General; Federal Bureau of Investigation; and Defense Contracting Audit Agency.

http://www.justice.gov/opa/pr/2009/October/09-civ-1173.html

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